Australian Property

Viewing posts in the Australian Property category

A textbook case for broad-based land taxes

ScreenHunter_30 Jul. 02 10.28 By Leith van Onselen The Age is running an article today on how developers are buying up sites around Melbourne and flipping them for huge profits once development approval has been obtained from the planning minister: Flipping has long been a part of Melbourne's property industry, but the surge in skyscraper approvals in recent years has dramatically multiplied the worth of development sites in the CBD if they can be sold with an approved permit. Equiset bought 464 Collins Street last May for $10.5 million, and immediately began plans for a 55-level apartment tower on the tiny site, known...
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Joye bashes bubble again

image005 Nothing new but here you...
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Dwelling approvals lifted in July

ScreenHunter_01 Mar. 03 22.48 By Leith van Onselen The Australian Bureau of Statistics (ABS) has released dwelling approvals data for the month of July. At the national level, the number of dwelling approvals rose by a seasonally adjusted 2.5% to 16,318. The overall increase was broad-based, with the volatile unit and apartment segment rising by 5.9% and the more stable house approvals segment increasing by 1.4%. The result beat analysts’ expectations, who had expected a 1.7% rise in approvals over the month. In the year to July 2014, dwelling approvals rose by a seasonally-adjusted 9.4%, with house approvals up by...
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AFG crocodile tears as FHBs collapse

ScreenHunter_30 Aug. 27 15.36 We'll have a full wrap on the latest AFG results tomorrow but today it's worth noting the tone of empathy in the press release: Fewer mortgages were arranged for first home buyers last month than at any time in the  past four years according to AFG, Australia’s largest mortgage broker. AFG Mortgage Index  shows that loans for first home buyers comprised only 9.5% of all mortgages processed in  August – the lowest such figure since June 2010. Of the total $3.9 billion of home loans  processed by the company, $324 million were for first home buyers. This contrasts sharply  with the $1.5...
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Stock on market rebounded in August

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen SQM Research has released its stock-on-market figures for the month of August, which revealed a 3.8% seasonal rebound in the number of for sale listings over the month, although total listings are still 2.1% below August 2013 (see below table). According to SQM: Of particular growing importance [in these results], is the narrowing difference in the yearly decrease of stock on market, where an ongoing trend has now become evident. Indeed we are not seeing the large drop in stock levels year on year, as we were at approximately this time last year, when the market...
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McGrath contradicts self on Chinese property boom

imgres By Leith van Onselen John McGrath from McGrath Real Estate has hit back at claims made yesterday by buyers’ agent, David Morrell, that "real estate agents and property lawyers are willingly helping foreign investors to illegally buy prestige homes in Melbourne and Sydney" and that this was "causing a domino effect" in the local market and helping to price-out locals. From The AFR: Prominent Sydney estate agent John McGrath says he hasn’t seen Asian buyers rorting foreign investment rules to buy blue-chip real estate. “I am not aware of any such practices,” said the founder and chief...
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Links 2 September 2014

ScreenHunter_01 Apr. 02 06.19 Global Macro / Markets / Investing: Has the market overpriced stocks and long bonds? - Econbrowser How the relentless bid from share buybacks has driven this rally - The Reformed Broker How sports betting is similar to the stock market - CNN Money Private debt funds are the new banks - Financial Times Alarm at Basel impact on shorts and swaps - Financial Times Hedge Funds Cut Gold Bull Bets to Lowest Since June - Bloomberg UN predicts climate hell in 2050 - The Guardian A global economy divided into the good, bad and ugly - The Guardian North America: Why many Americans...
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The Economist warns on renewed bubbles

20140830_FNC602 From The Economist: Since some recovery was bound to occur after the housing slump, how worrying are the renewed signs of exuberance? To assess whether house prices are at sustainable levels, we use two yardsticks. One is affordability, measured by the ratio of prices to income per person after tax. The other is the case for investing in housing, based on the ratio of house prices to rents, much as stockmarket investors look at the ratio of equity prices to earnings. If these gauges are higher than their historical averages then property is deemed overvalued; if they are lower, it is...
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Joye warns again on housing bubble

perfect_bubble From Chris Joye at the AFR: I believe that Australian home values measured relative to disposable incomes are currently breaching the all-time records set in both 2007 and 2010. Yet I expect the current boom, which is arguably turning into a bubble, to continue until the RBA starts raising interest rates. Importantly, you do not require mania or double-digit credit growth to have a bubble, as some pundits claim. What you do need is asset prices way above reasonable estimates of fair value and high levels of leverage, both of which Australia possesses today. Credit growth numbers are only...
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More reports of foreign buyers evading FIRB

ScreenHunter_06 May. 06 09.27 By Leith van Onselen Another day, another report of foreign investors in Australian property slipping through the Foreign Investment Review Board's (FIRB) net, this time from The AFR: Real estate agents and property lawyers are willingly helping foreign investors to illegally buy prestige homes in Melbourne and Sydney, says buyers’ agent David Morrell... Mr Morrell likened the powers of the FIRB to “a slap in the face with a wet lettuce”. He said estate agents, whom the FIRB relied upon to report foreign buyers flouting the rules, were looking the other way in return for higher...
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Sloan’s negative gearing defence sours

images By Leith van Onselen After her dreadful defence of negative gearing in July (thoroughly debunked here), The Australian's Judith Sloan has returned with another abusive post aimed squarely at us "lefty" doomsayers that dare question the merits of Australia's famed tax expenditures on investment property. Sloan's article is chock full of straw man arguments, misrepresentation and insults in lieu of reason. Let's take a look at her latest installment: Without the faintest clue of the rationale or application of the relevant tax rules, these advocates for “social justice” will still quote...
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Auction clearances rise

ScreenHunter_19 Mar. 13 13.12 By Leith van Onselen The national auction clearance rate jumped sharply over the weekend on the back of big rises in Sydney and Melbourne. According to RP Data, the national weighted average preliminary auction clearance rate was 72.2% over the weekend, which was up 5.5% from the 66.7% preliminary clearance rate reported last weekend. Sydney’s clearance rate rose by 4.9% to 81.1%, whereas Melbourne’s rose to 71.0% (last weekend 64.1%). Brisbane, which typically only has a small number of auctions, experienced a decline in its clearance rate to 47.0% from 52.1% the weekend before. Overall...
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RP Data weekend property market update

ScreenHunter_18 Mar. 18 17.58 Click to view RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 31 August 2014. This week’s report includes: Latest weekly dwelling value results; Auction results & clearance rates; Latest median house & unit prices; Average time on market & vendor discounts; Mortgage market activity; and New listings...
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RP Data house prices jump in August

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen RP Data’s daily house price index for 31 August was released yesterday, which has enabled me to calculate monthly price movements for the five major capital city markets. As shown below, home values at the 5-city rose by 1.18% in August, driven by a big 1.84% gain in Sydney and a 2.26% jump in Adelaide, although gains were recorded across all major markets: It was the third consecutive lift in values after May’s large seasonal fall: Values at the 5-city level have now increased by 6.21% since the beginning of the year, with all major capitals, except...
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Investors hog as owner occupier’s slow

ScreenHunter_05 Apr. 15 22.08 By Leith van Onselen The Reserve Bank of Australia (RBA) today released its private sector credit aggregates data for the month of July: A chart showing the long-run breakdown in the components is provided below: Personal credit growth (0.2% MoM; 0.5% QoQ; 0.8% YoY) and business credit growth (0.3% MoM; 1.5% QoQ; 3.4% YoY) continue to grow at a modest pace in annual terms, whereas housing credit growth (0.5% MoM; 1.6% QoQ; 6.5% YoY) is stronger, but remains at fairly subdued levels relative to its long-run average growth rate; although it is still growing more than twice as quickly...
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Weekly RP Data Australian house price update

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen In the week ended 28 August 2014, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, rose by 0.28% (see next chart). Growth in this week's home values was fairly broad-based, with all capitals except Brisbane experiencing rises (see next chart). So far this month, home values have risen by 1.32%, with gains across the board but strongest growth in Sydney and Adelaide (see next chart): Values are up by 6.36% so far in 2014, with all major capitals except for Perth experiencing growth, and particularly...
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Dump stamp duty for land taxes

ScreenHunter_30 Aug. 27 15.36 By Leith van Onselen The Housing Industry Association (HIA) yesterday released a report lamenting the high cost of stamp duty in Australia, which "makes household indebtedness worse by increasing required borrowings" and damages the "long-term financial well-being of ordinary homebuyers": “The typical homebuyer in Victoria is hit with a $24,100 stamp duty bill, the highest in the country,” remarked Shane Garrett. “In states like New South Wales and Western Australia, the average homeowner can look forward to handing almost $20,000 over to the state government before the removals truck...
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New home sales boomlet ends (members)

dfedv From the HIA today: A downward trend in total new home sales has emerged, affirming previous calls that sales had reached a peak earlier in 2014. The 2013/14 financial year saw the recovery in new home sales gather strong momentum. The 2014/15 financial year, however, has started with the emergence of a downward trend, suggesting that monthly new home sales peaked back in April. Total seasonally adjusted new home sales fell by 5.7 per cent in the month of July 2014, a result reflected in both detached house as well as multi-unit sales. Detached house sales declined by 4.7 per cent, while multi-unit...
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Australia’s boom to bust

ScreenHunter_01 Feb. 17 18.55 By Leith van Onselen Find above an interesting video interview on The AFR with Lindsay David, author of the new book Australia Boom to Bust. In the interview, David slams Australia's record high mortgage debt (see next chart), claiming that "no one in the Western world has ever done what we are doing”. He also claims The AFR article attached to the interview that the three pillars of the Australian economy: real estate, resources and the banks will eventually collapse: He says that as Chinese authorities appreciate, they’ve built more houses and apartments than they need, demand...
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RBA too late the hero on mortgage risks (members)

ScreenHunter_31 Aug. 28 07.42 By Leith van Onselen The Reserve Bank of Australia (RBA) has provided its second submission to the Murray Financial System Inquiry (FSI), which reportedly warns against moves to bolster competition in the mortgage market for fear that it would pump even more funds into property and heighten financial system risks.  From Business Spectator: “The supply of mortgage finance in Australia is ample,” the RBA said. “Therefore, any proposed policies that could further increase that supply should be subject to rigorous analysis of their costs, benefits to consumers and risks to financial...
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Bursting the banks’ “no bubble” bubble (members)

ScreenHunter_04 Apr. 15 22.05 By Leith van Onselen As noted yesterday afternoon by Houses & Holes, Australia's big four bank chief economists united for an interview with The AFR to declare that Australian housing is not a bubble. For a bit of fun, I thought that it was worth evaluating each of the banks' arguments to determine whether they hold water. First up is the ANZ's Warren Hogan: “Certainly no bubble,” said Mr Hogan. “The perceived expensiveness of our property market is as much as anything a social issue, affordability issues. We simply don’t have the speculative credit element there to describe...
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Interest-only mortgages hit record

ScreenHunter_31 Sep. 02 16.36   By Martin North, cross-posted from the Digital Finance Analytics Blog: APRA just released their quarterly data on housing exposures of the Authorised Deposit-taking Institutions in Australia for the June 2014 quarter. As at 30 June 2014, the total of residential term loans to households held by all ADIs was $1.23 trillion. This is an increase of $29.7 billion (2.5 per cent) on 31 March 2014 and an increase of $97.2 billion (8.6 per cent) on 30 June 2013. Owner-occupied loans accounted for 66.2 per cent of residential term loans to households. Owner-occupied loans were $811.7 billion,...
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Aussie John: First home buyers are “stuffed” (members)

ScreenHunter_3917 Aug. 25 09.30 By Leith van Onselen Aussie Home Loans founder, John Symonds, has declared would-be first time buyers are “stuffed” due to onerous deposit requirements that are preventing them from being able to take on jumbo-sized mortgages. From News.com.au: “Certainly the great Aussie dream is becoming a distant memory, which is unfortunate because it goes right to the fabric of our society.” “I see surveys showing affordability is the best in decades, but I scratch my head about that because the dollar amounts are so huge. And interest rates will eventually come up a bit”... Mr Symond...
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Former RBA man pricks Capt’ Glenn’s bubble

url Chris Joye brings the pain again today in an excellent interview with Jeremy Lawson, a former senior economist at the RBA, who calls the housing bubble what it is, from the AFR: ...As an economist focused on investing Standard Life’s capital around the world, Mr Lawson said he can take a longer-term view than “sell-side” counterparts inside investment banks...it is “reasonable to assume that future house prices will grow in line with real household ­disposable income as the commodity boom unwinds...That would imply overvaluation of between 20 per cent and 30 per...
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RP Data weekend property market update (members)

ScreenHunter_18 Mar. 18 17.58 Click to view RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 24 August 2014. This week’s report includes: Latest weekly dwelling value results; Auction results & clearance rates; Latest median house & unit prices; Average time on market & vendor discounts; Mortgage market activity; and New listings...
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